If your company is involved in a shareholder dispute, it can be complicated and stressful. Our Solicitors are experienced at successfully helping shareholders and companies reach cost-effective and timely resolutions.
Unfortunately, shareholder disputes are a common issue within corporate life and often occur when a minority shareholder believes that a majority shareholder is not acting in the best interests of the company.
Our Dispute Resolution Solicitors will take the time to gain an understanding of your concerns and will assess whether your shareholder rights have been breached by another party. We will then seek to resolve the dispute by constructing a bespoke strategy tailored to your needs.
Shareholder disputes can take on many forms and can simply result from a clash of personalities. A shareholder dispute can have a direct effect on the day-to-day running of the business and can cause problems surrounding a shareholder’s continued role in the company.
Not only do our Dispute Resolution Solicitors represent shareholders, but we also have extensive experience acting on behalf of companies, businesses, and limited liability partnerships (LLPs) who are faced with shareholder and partnership disputes.
Common Shareholder Disputes
Disputes between shareholders can occur for many reasons, including:
- Dividend policies favouring some shareholders over others;
- General conflicts of interest;
- Minority shareholders believing they are being unfairly prejudiced by the controlling or majority shareholders;
- Shareholder Agreements have been breached;
- Shareholders are concerned that other shareholders are trying to take the company in a different direction to their vision;
- Shareholders are not included in meetings;
- Shareholders believe the directors are in breach of their director duties.
If you find yourself engaged in a shareholder dispute, our Dispute Resolution Solicitors will provide you with proactive legal advice, helping you to explore your best options to reach a pragmatic solution.
To resolve a shareholder dispute, a company or another existing shareholder may offer to buy back the shares held by the minority shareholder. However, difficulties can arise if:
- A company cannot afford to buy the shares;
- A shareholder is not willing to sell their shares; or
- The value of the shares cannot be agreed.
It may be necessary to seek an independent share valuation to resolve the share valuation dispute. Our Corporate Solicitors can check the share valuation provisions in the Articles of Association and, if necessary, work with company and forensic accountants to achieve an agreed share valuation.
Unfair Prejudice Petition
A shareholder can issue an Unfair Prejudice Petition under the Companies Act 1994 if the conduct of the company’s affairs does not align with the shareholder’s interests.
Examples of conduct that may be deemed to be unfairly prejudicial are:
- A failure to pay reasonable dividends;
- A failure to provide information;
- Improper allotment of shares; and
- Misappropriation of company assets.
Early legal advice should be taken on the potential for an Unfair Prejudice Petition yo be issued.
Court cases can be time-consuming, expensive and distract the business from its goals. As Dispute Resolution Solicitors we understand that business must go on, and the interests of all shareholders are best served by reaching an amicable solution, rather than risk Court litigation.
However, in some cases, it may become necessary to proceed with a Court application or respond to Court proceedings. We have the experience and expertise to guide you through the legal process. Our team will provide you with a robust and clear litigation strategy.
It is important to seek legal advice early on because, in reality, the majority of shareholder disputes can be settled if they are handled correctly from the outset and through the use of Alternate Dispute Resolution (ADR) methods, such as Mediation.
Where possible we will offer a fixed fee, so you will know what the costs are from the start. For more complex or uncertain projects, we will provide you with an estimate of the likely fees involved and keep you updated throughout the matter.
How to get in contact
Our Dispute Resolution Solicitors are on hand to provide expert advice and assist you wherever you are based. Please call us for a no-obligation, initial discussion on 01256 460830 or email [email protected].
Our offices are based in Basingstoke and we assist clients across the country.
We aim to keep legal jargon to a minimum and guide you through the process in a manner that is easy to understand.
Our highly-skilled solicitors offer tailored, strategic solutions to even the most complex matters, ensuring you receive the guidance and support you need.
We will be by your side throughout every stage of the process and will provide you with regular updates and advice along the way.
We communicate thoroughly with you from the outset to ensure that we fully understand your individual needs. This allows us to accurately quote for your matter leaving you without any unexpected surprises and fees further down the line.
We provide our clients with a concise and transparent breakdown of costs from the outset of the matter and throughout any subsequent stages. This enables you to build faith and trust in us early on to form a lasting relationship.
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